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FACEBOOK IN LICENSING TALKS WITH THE MAJORS

Rights holders, already swimming in cash from streaming services, may get a massive injection of new revenue from Facebook.

Mark Zuckerberg’s social behemoth is offering the major labels and publishers hundreds of millions of dollars to enable Facebook users to legally include music in videos they upload, informed sources told Bloomberg.

Under current law, rights holders are required to ask Facebook to take down videos with infringing material.

The negotiations between Facebook and rights holders have been going on for months, and Facebook has promised to build a system to identify and tag copyright-infringing content, these sources said. The sticking point is that such a setup will take as long as two years to complete, and neither side reportedly wants to wait that long.

The talks are taking place as Facebook is rolling out Watch, its new video hub—and prospective YouTube challenger—whose content will include Facebook-funded original series. But the company has chosen to fast-track the clearing of user-generated material, which makes up the bulk of videos being uploaded to the service.

Tellingly, Facebook’s leading negotiator in the talks is former YouTube exec Tamara Hrivnak, who joined the company earlier this year. Hrivnak previously worked at Warner/Chappell, and is said to be well-liked by her former peers.

But in what Bloomberg describes as a “Faustian Bargain,” by taking Facebook’s money in return for giving it the ability to legally host video and music, rights holders are taking the risk of creating another YouTube.

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